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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549



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FORM 10-Q/A

Amendment No. 2



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|x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended March 31, 2003



| ̈ | Transition Report Under Section 13 or 15(d) of the Exchange Act
|- | ---------------------------------------------------------------



For the transition period from
 to



Commission File Number 0-22439



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FISHER COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)



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|WASHINGTON                                                    |  | 91-0222175                            
|------------------------------------------------------------- |  | --------------------------------------
|(State or Other Jurisdiction ofIncorporation or Organization) |  | (I.R.S. EmployerIdentification Number)



100 Fourth Ave. N

Suite 440

Seattle, Washington    98109

(Address of Principal Executive Offices) (Zip Code)



(206) 404-7000

(Registrants Telephone Number, Including Area Code)



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Indicate by check mark whether the registrant: (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.    Yes  x    No ̈



Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x    No ̈



Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date:



Common Stock, $1.25 par value, outstanding as of March 31, 2003: 8,594,060



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##### Table of Contents

PART I

FINANCIAL INFORMATION



Explanatory Note:
This Amendment No. 2 of our Quarterly Report on Form 10-Q of Fisher Communications, Inc. sets forth restated financial statements and revised related disclosures as a result of revised accounting to recognize a gain in the first quarter of 2003 on
sale of real estate. This amendment also sets forth restated financial statements and revised related disclosures contained in Amendment No. 1 of our Quarterly Report on Form 10-Q (Amendment No. 1) as a result of revised accounting for
goodwill in connection with the adoption of Statement of Financial Accounting Standards No. 142, accrual of certain obligations for retention bonuses, recognition of additional obligations and settlement losses relating to a pension plan which is in
the process of termination, a change in the reporting of segment information, and reclassification of certain amounts within the condensed consolidated statements of cash flows. See Note 2 to our unaudited condensed consolidated financial statements
for further discussion of the restatements. Financial Statements (Part I, Item 1) and Managements Discussion and Analysis of Financial Condition and Results of Operations (Part I, Item 2) have been revised to reflect the restatements. This
amendment of our Quarterly Report on Form 10-Q also incorporates the revisions to Part I, Item 4  Controls and Procedures that were initially included in Amendment No. 1. Amendment No. 1 and this amendment to our Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 2003 amend and restate only those items of the original Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003 which have been affected by the restatements. In order to preserve the nature
and character of the disclosures set forth in such items as originally filed, no attempt has been made in this amendment or Amendment No. 1 to modify or update the disclosures in the original Quarterly Report on Form 10-Q except as required to
reflect the effects of the restatements, to make revisions to the Notes to the unaudited condensed consolidated financial statements and to make the other revisions described above. As a result, this Quarterly Report on Form 10-Q/A contains
forward-looking information which has not been updated for events subsequent to the date of the original filing, and the Company directs you to its SEC filings made subsequent to that original filing date for additional information.



Item 1. Financial Statements



The
following Condensed Consolidated Financial Statements (unaudited) are presented for the Registrant, Fisher Communications, Inc., and its subsidiaries.



|1. |  | Condensed Consolidated Statement of Operations (restated):Three months ended March 31, 2003 and 2002.          
|-- |  | ---------------------------------------------------------------------------------------------------------------
|   | 
|2. |  | Condensed Consolidated Balance Sheet (restated):March 31, 2003 and December 31, 2002.                          
|   | 
|3. |  | Condensed Consolidated Statement of Cash Flows (restated):Three months ended March 31, 2003 and 2002.          
|   | 
|4. |  | Condensed Consolidated Statement of Comprehensive Income (restated):Three months ended March 31, 2003 and 2002.
|   | 
|5. |  | Notes to Condensed Consolidated Financial Statements.                                                          



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##### Table of Contents

ITEM 1  FINANCIAL STATEMENTS



FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS



|                                                                                                                          |  | Three months endedMarch 31 |       
|------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------
|                                                                                                                          |  | 2003Restated               |       
|(in thousands, except per share amounts)                                                                                  |  |                            |       
|(Unaudited)                                                                                                               |  |                            |       
|Revenue                                                                                                                   |  | $                          | 34,794
|Costs and expenses                                                                                                        |  |                            |       
|Cost of services sold (exclusive of depreciation reported separately below, amounting to $3,625 and $3,875,
respectively) |  |                            | 17,494
|Selling expenses                                                                                                          |  |                            | 6,366 
|General and administrative expenses                                                                                       |  |                            | 11,487
|Depreciation                                                                                                              |  |                            | 4,799 
|                                                                                                                          |  |                            |       
|                                                                                                                          |  |                            | 40,146
|                                                                                                                          |  |                            |       
|Loss from operations                                                                                                      |  |                            | (5,352
|Net loss on derivative instruments                                                                                        |  |                            | (242  
|Loss from extinguishment of long-term debt                                                                                |  |                            |       
|Other income, net                                                                                                         |  |                            | 5,864 
|Equity in operations of equity investees                                                                                  |  |                            | 4     
|Interest expense                                                                                                          |  |                            | (5,536
|                                                                                                                          |  |                            |       
|Loss from continuing operations before income taxes                                                                       |  |                            | (5,262
|Provision for federal and state income taxes (benefit)                                                                    |  |                            | (2,015
|                                                                                                                          |  |                            |       
|Loss from continuing operations                                                                                           |  |                            | (3,247
|Income from discontinued operations, net of income tax:                                                                   |  |                            |       
|Real estate operations sold                                                                                               |  |                            |       
|Georgia television stations                                                                                               |  |                            | 301   
|                                                                                                                          |  |                            |       
|Loss before cumulative effect of change in accounting principle                                                           |  |                            | (2,946
|Cumulative effect of change in accounting principle, net of income tax benefit of $34,662                                 |  |                            |       
|                                                                                                                          |  |                            |       
|Net loss                                                                                                                  |  | $                          | (2,946
|                                                                                                                          |  |                            |       
|Income (loss) per share:                                                                                                  |  |                            |       
|From continuing operations                                                                                                |  | $                          | (0.38 
|From discontinued operations                                                                                              |  |                            | 0.04  
|Cumulative effect of change in accounting principle                                                                       |  |                            |       
|                                                                                                                          |  |                            |       
|Net loss per share                                                                                                        |  | $                          | (0.34 
|                                                                                                                          |  |                            |       
|Income (loss) per share assuming dilution:                                                                                |  |                            |       
|From continuing operations                                                                                                |  | $                          | (0.38 
|From discontinued operations                                                                                              |  |                            | 0.04  
|Cumulative effect of change in accounting principle                                                                       |  |                            |       
|                                                                                                                          |  |                            |       
|Net loss per share assuming dilution                                                                                      |  | $                          | (0.34 
|                                                                                                                          |  |                            |       
|Weighted average shares outstanding                                                                                       |  |                            | 8,594 
|Weighted average shares outstanding assuming dilution                                                                     |  |                            | 8,594 



See
accompanying notes to condensed consolidated financial statements.



3



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##### Table of Contents

FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET



|                                                                              |  | March 312003Restated |         |   | December 312002Restated |  
|----------------------------------------------------------------------------- |  | -------------------- | ------- | - | ----------------------- | -
|(in thousands, except share and per share amounts)                            |  |                      |         |   |                         |  
|(Unaudited)                                                                   |  |                      |         |   |                         |  
|                                                                              |  |                     
|ASSETS                                                                        |  |                      |         |   |                         |  
|                                                                              |  |                     
|Current Assets                                                                |  |                      |         |   |                         |  
|Cash and short-term cash investments                                          |  | $                    | 14,063  |   |                         | $
|Restricted cash                                                               |  |                      |         |   |                         |  
|Receivables                                                                   |  |                      | 23,580  |   |                         |  
|Prepaid income taxes                                                          |  |                      |         |   |                         |  
|Prepaid expenses                                                              |  |                      | 8,189   |   |                         |  
|Television and radio broadcast rights                                         |  |                      | 5,802   |   |                         |  
|Current assets held for sale                                                  |  |                      | 3,693   |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|Total current assets                                                          |  |                      | 55,327  |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|Marketable Securities, at market value                                        |  |                      | 104,993 |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|Other Assets                                                                  |  |                      |         |   |                         |  
|Cash value of life insurance and retirement deposits                          |  |                      | 13,942  |   |                         |  
|Television and radio broadcast rights                                         |  |                      | 5,175   |   |                         |  
|Goodwill, net                                                                 |  |                      | 66,586  |   |                         |  
|Intangible assets                                                             |  |                      | 765     |   |                         |  
|Investments in equity investees                                               |  |                      | 2,926   |   |                         |  
|Other                                                                         |  |                      | 12,318  |   |                         |  
|Noncurrent assets held for sale                                               |  |                      | 32,073  |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|                                                                              |  |                      | 133,785 |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|Property, Plant and Equipment, net                                            |  |                      | 209,941 |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|                                                                              |  | $                    | 504,046 |   |                         | $
|                                                                              |  |                      |         |   |                         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                          |  |                      |         |   |                         |  
|                                                                              |  |                     
|Current Liabilities                                                           |  |                      |         |   |                         |  
|Notes payable                                                                 |  | $                    | 7,681   |   |                         | $
|Trade accounts payable                                                        |  |                      | 4,084   |   |                         |  
|Accrued payroll and related benefits                                          |  |                      | 8,792   |   |                         |  
|Television and radio broadcast rights payable                                 |  |                      | 3,658   |   |                         |  
|Other current liabilities                                                     |  |                      | 2,036   |   |                         |  
|Current liabilities held for sale                                             |  |                      | 2,569   |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|Total current liabilities                                                     |  |                      | 28,820  |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|Long-term Debt, net of current maturities                                     |  |                      | 258,424 |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|Other Liabilities                                                             |  |                      |         |   |                         |  
|Accrued retirement benefits                                                   |  |                      | 17,517  |   |                         |  
|Deferred income taxes                                                         |  |                      | 25,082  |   |                         |  
|Television and radio broadcast rights payable, long-term portion              |  |                      | 168     |   |                         |  
|Other liabilities                                                             |  |                      | 4,821   |   |                         |  
|Other liabilities held for sale                                               |  |                      | 450     |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|                                                                              |  |                      | 48,038  |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|Commitments and Contingencies                                                 |  |                      |         |   |                         |  
|Stockholders Equity                                                          |  |                      |         |   |                         |  
|Common stock, shares authorized 12,000,000, $1.25 par value; issued 8,594,060 |  |                      | 10,743  |   |                         |  
|Capital in excess of par                                                      |  |                      | 3,488   |   |                         |  
|Deferred compensation                                                         |  |                      | (9      | ) |                         |  
|Accumulated other comprehensive income - net of income taxes:                 |  |                      |         |   |                         |  
|Unrealized gain on marketable securities                                      |  |                      | 67,583  |   |                         |  
|Minimum pension liability                                                     |  |                      | (1,773  | ) |                         |  
|Retained earnings                                                             |  |                      | 88,732  |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|                                                                              |  |                      | 168,764 |   |                         |  
|                                                                              |  |                      |         |   |                         |  
|                                                                              |  | $                    | 504,046 |   |                         | $
|                                                                              |  |                      |         |   |                         |  



See
accompanying notes to condensed consolidated financial statements.



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS



|                                                                                           |  | Three months endedMarch 31 |        
|------------------------------------------------------------------------------------------ |  | -------------------------- | -------
|                                                                                           |  | 2003Restated               |        
|(in thousands)                                                                             |  |                            |        
|(Unaudited)                                                                                |  |                            |        
|                                                                                           |  |                           
|Cash flows from operating activities                                                       |  |                            |        
|Net loss                                                                                   |  | $                          | (2,946 
|Adjustments to reconcile net loss to net cash provided by operating activities             |  |                            |        
|Depreciation and amortization                                                              |  |                            | 4,956  
|Noncurrent deferred income taxes                                                           |  |                            | (7,526 
|Cumulative effect of change in accounting principle                                        |  |                            |        
|Equity in operations of equity investees                                                   |  |                            | (4     
|Gain on sale of marketable securities                                                      |  |                            | (3,675 
|Gain on sale of real estate                                                                |  |                            | (1,425 
|Amortization of deferred loan costs                                                        |  |                            | (76    
|Increase in fair value of derivative instruments                                           |  |                            |        
|Loss from extinguishment of debt                                                           |  |                            |        
|Net loss from discontinued operations                                                      |  |                            |        
|Amortization of television and radio broadcast rights                                      |  |                            | 2,991  
|Payments for television and radio broadcast rights                                         |  |                            | (4,014 
|Other                                                                                      |  |                            | 1,231  
|Change in operating assets and liabilities                                                 |  |                            |        
|Receivables                                                                                |  |                            | 7,608  
|Prepaid income taxes                                                                       |  |                            | 5,680  
|Prepaid expenses                                                                           |  |                            | (1,977 
|Cash value of life insurance and retirement deposits                                       |  |                            | (65    
|Other assets                                                                               |  |                            | (1,487 
|Trade accounts payable, accrued payroll and related benefits and other current liabilities |  |                            | 1,299  
|Accrued retirement benefits                                                                |  |                            | (945   
|Other liabilities                                                                          |  |                            | 1,068  
|                                                                                           |  |                            |        
|Net cash provided by operating activities                                                  |  |                            | 693    
|                                                                                           |  |                            |        
|Cash flows from investing activities                                                       |  |                            |        
|Proceeds from sale of real estate and property, plant and equipment                        |  |                            | 111    
|Proceeds from sale of marketable securities                                                |  |                            | 5,169  
|Proceeds from collection of installment note receivable                                    |  |                            | 3,185  
|Restricted cash                                                                            |  |                            | 12,778 
|Purchase of property, plant and equipment                                                  |  |                            | (3,013 
|                                                                                           |  |                            |        
|Net cash provided by (used in) investing activities                                        |  |                            | 18,230 
|                                                                                           |  |                            |        
|Cash flows from financing activities                                                       |  |                            |        
|Net payments under notes payable                                                           |  |                            | (122   
|Borrowings under borrowing agreements and mortgage loans                                   |  |                            |        
|Payments on borrowing agreements and mortgage loans                                        |  |                            | (28,178
|Payment of deferred loan costs                                                             |  |                            | (75    
|Cash dividends paid                                                                        |  |                            |        
|                                                                                           |  |                            |        
|Net cash provided by (used in) financing activities                                        |  |                            | (28,375
|                                                                                           |  |                            |        
|Net increase (decrease) in cash and short-term cash investments                            |  |                            | (9,452 
|Cash and short-term cash investments, beginning of period                                  |  |                            | 23,515 
|                                                                                           |  |                            |        
|Cash and short-term cash investments, end of period                                        |  | $                          | 14,063 
|                                                                                           |  |                            |        



See
accompanying notes to condensed consolidated financial statements.



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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME



|                                                                    |  | Three months endedMarch 31 |       
|------------------------------------------------------------------- |  | -------------------------- | ------
|                                                                    |  | 2003Restated               |       
|(in thousands)                                                      |  |                            |       
|(Unaudited)                                                         |  |                            |       
|                                                                    |  |                           
|Net loss                                                            |  | $                          | (2,946
|                                                                    |  |                           
|Other comprehensive income:                                         |  |                            |       
|Unrealized gain on marketable securities                            |  |                            | 904   
|Effect of income taxes                                              |  |                            | (317  
|                                                                    |  |                           
|Net gain on interest rate swap                                      |  |                            |       
|Effect of income taxes                                              |  |                            |       
|                                                                    |  |                           
|Loss on settlement of interest rate swap reclassified to operations |  |                            |       
|Effect of income taxes                                              |  |                            |       
|                                                                    |  |                           
|Unrealized gain on marketable securities reclassified to operations |  |                            | (3,114
|Effect of income taxes                                              |  |                            | 1,090 
|                                                                    |  |                           
|Adjustment to minimum pension liability                             |  |                            | 630   
|Effect of income taxes                                              |  |                            | (220  
|                                                                    |  |                            |       
|Comprehensive loss                                                  |  | $                          | (3,973
|                                                                    |  |                            |       



See
accompanying notes to condensed consolidated financial statements.



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FISHER COMMUNICATIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



1. The unaudited financial information furnished herein, in the opinion of management,
reflects all adjustments which are necessary to state fairly the consolidated financial position, results of operations, and cash flows of Fisher Communications, Inc. and subsidiaries (the Company) as of and for the periods indicated.
Fisher Communications, Inc.s principal wholly-owned subsidiaries include Fisher Broadcasting Company, Fisher Media Services Company, and Fisher Properties Inc. The Company presumes that users of the interim financial information herein have
read or have access to the Companys audited consolidated financial statements and that the adequacy of additional disclosure needed for a fair presentation, except in regard to material contingencies or recent subsequent events, may be
determined in that context. Accordingly, footnote and other disclosures which would substantially duplicate the disclosures contained in Form 10-K/A for the year ended December 31, 2002 filed by the Company have been omitted. The financial
information herein is not necessarily representative of a full years operations.



2. Restatement



Gain on Sale of Real Estate - The Companys real estate subsidiary did not properly record in the first quarter of 2003 a gain resulting from a sale of real
estate. Because a substantial portion of the proceeds from a real estate sale that occurred in 2000 were in the form of an installment note, a portion of the gain on that sale was deferred and was to be recognized as the note was collected. The
balance of the note was received in full in March 2003, and the previously deferred gain (included in Other liabilities) amounting to $1,063,000 should have been recognized in income at that time. The Company has revised its financial statements for
the three months ended March 31, 2003 to include the gain on the sale, net of income taxes, in its results of operations. Accordingly, net loss for the three months ended March 31, 2003 was decreased by $677,000.



Goodwill Impairment - Effective January 1, 2002, the Company adopted Statement of
Financial Accounting Standards No. 142 Goodwill and Other Intangible Assets (FAS 142). FAS 142 requires the Company to test goodwill and intangible assets for impairment upon adoption and to test goodwill at least annually, or whenever
events indicate that an impairment may exist. Upon the adoption of FAS 142, the Company, with the concurrence of its independent auditors, concluded there was no impairment of goodwill. Subsequent to the issuance of the Companys consolidated
financial statements as of and for the year ended December 31, 2002 and the unaudited condensed consolidated financial statements as of March 31, 2003 and for the three months then ended, the Company and the independent auditors determined that in
performing the Companys initial impairment test, the level (reporting unit) at which the Company should assess goodwill for impairment had been incorrectly identified. The Company has determined that the impairment test should have been
conducted at the operating segment level, which consists and requires separate assessment, with respect to the broadcast operations, of each of the Companys ten television and radio station groups. As a result of the reassessment of the
reporting unit, the Company reperformed the first step of the transitional impairment test, which indicated that impairment existed. Completion of the second step of the transitional impairment test resulted in a pre-tax goodwill impairment charge
of $99,035,000 related to five television reporting units and a related tax benefit of $34,662,000 (as the aforementioned goodwill was deductible for tax purposes). The required annual impairment test was also reperformed based on the new
determination of reporting units, resulting in no further impairment.



As
required by the transition provisions of FAS 142, the net loss of $64,373,000 resulting from the reperformed transitional test is recorded as the cumulative effect of a change in accounting principle in the accompanying condensed consolidated
financial statements for the three months ended March 31, 2002. This restatement item has no effect on the Companys previously reported revenues and cash flows.



On January 29, 2003, the Companys broadcasting subsidiary signed an asset purchase agreement for the sale of its two Georgia
television stations (see Note 4), and recognized an impairment loss on the sale amounting to $28,613,000, offset by a related tax benefit of $10,015,000. The estimated loss was originally reported in the three months ended March 31, 2003; however,
because the aforementioned goodwill impairment loss significantly reduced the goodwill balances pertaining to the Georgia television stations, the Company has restated its financial statements for the three months ended March 31, 2003 to eliminate
the impairment loss on sale. As a result, net loss for the quarter ended March 31, 2003 was decreased by $18,598,000.



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Retention Bonus - Subsequent to the issuance of the Companys consolidated financial statements as of and for
the year ended December 31, 2002 and the unaudited condensed consolidated financial statements as of March 31, 2003 and for the three months then ended, the Company concluded that certain obligations for retention bonuses entered into in the fourth
quarter of 2002 as described in Note 10 to these unaudited condensed consolidated financial statements should have been accrued over the service period specified in the related retention agreements. Accordingly, the Company revised its financial
statements for the year ended December 31, 2002 to record an obligation of $389,000 and related tax effects in the fourth quarter of 2002. Net loss for the year ended December 31, 2002 was increased by $248,000. The Company also revised its
financial statements for the three months ended March 31, 2003 to record an additional liability of $886,000 and related tax effects. Net loss for the quarter ended March 31, 2003 was increased by $564,000. This adjustment does not impact the three
months ended March 31, 2002.



Pension Plan - In addition, subsequent to
the issuance of the consolidated financial statements as of and for the year ended December 31, 2002 and the unaudited condensed consolidated financial statements as of March 31, 2003 and for the three months then ended, the Company concluded that
certain pension-related expenses should have been recorded in the first quarter of 2003 and in prior periods.



The Company had a defined-benefit plan for all non-broadcasting employees. Benefit accruals under this plan ceased in July 2001 and plan assets were distributed to participants between 2001 and the first half of 2003.
Certain settlement losses relating to the distribution of plan assets should have been recognized in 2002 and in the first quarter of 2003. In addition, the Company determined that additional pension benefits paid in 2003 to certain retired
participants who worked beyond their normal retirement age (Late Retirees) had not been recognized over periods in which those employees provided services. Accordingly, the Company revised its financial statements to record the
settlement losses and the additional obligation to Late Retirees (cumulatively, the Pension Adjustments). The impact of recording the Pension Adjustments also had the effect of reducing Retained Earnings by $433,000 as of December 31,
2002, increasing Accrued Retirement Benefits by $681,000, and reducing Deferred Income Tax Liabilities by $248,000 to reflect the pension liability and expenses that should have been recorded as of that date. Pension adjustments to record the
additional expenses that should have been recognized from January 1, 2000 through December 31, 2002 were recorded in the fourth quarter of 2002 and amounted to $134,000 after taxes. Amounts related to 2000, 2001, and the first three quarters of
2002, totaling $6,000, net of taxes, were not significant in relation to the fourth quarter of 2002 or to the prior periods. The impact of recording the Pension Adjustments for the first quarter of 2003 was an increase in net loss for the quarter of
$282,000.



Segment Reporting - As further discussed in Note 9 to the
accompanying condensed consolidated financial statements, the Company restated its reportable segments to present the previously reported broadcasting segment as two reportable segments: television and radio. In addition, the previously reported
media services segment is presented as the Fisher Plaza segment with the remaining operations in an all other category. The segmental disclosures for comparable periods have been restated to conform to this presentation.



Cash Flows  Proceeds from sale of marketable securities amounting to $5,169,000
and proceeds from collection of an installment note receivable from the sale of real estate amounting to $3,185,000, originally included in cash flows provided by operating activities, have been reclassified to cash provided by investing activities
in the accompanying condensed consolidated statement of cash flows for the three months ended March 31, 2003. This reclassification has no effect on net income or loss, but decreased cash flows from operating activities by $8,354,000 and increased
cash flows from investing activities by the same amount.



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##### Table of Contents

A summary of the significant effects of the restatements on the Companys condensed consolidated statement of
operations for the three months ended March 31, 2002 is as follows (in thousands, except per share amounts):



|                                                                                          |  | As originallyreported |        |   | Adjustments |   |         | As restated inForm 10-Qfor periodendedMarch 31, 2002 | 
|----------------------------------------------------------------------------------------- |  | --------------------- | ------ | - | ----------- | - | ------- | ---------------------------------------------------- | 
|Loss before cumulative effect of change in accounting principle                           |  | $                     | (7,758 | ) |             |   |         |                                                      | 
|Cumulative effect of change in accounting principle, net of income tax benefit of $34,662 |  |                       |        |   |             | $ | (64,373 | )                                                    | 
|                                                                                          |  |                       |        |   |             |   |         |                                                      | 
|Net loss                                                                                  |  | $                     | (7,758 | ) |             | $ | (64,373 | )                                                    | 
|                                                                                          |  |                       |        |   |             |   |         |                                                      | 
|Loss per share (basic and assuming dilution)                                              |  |                       |        |   |             |   |         |                                                      | 
|Loss before cumulative effect of change in accounting principle                           |  | $                     | (0.90  | ) |             |   |         |                                                      | 
|Cumulative effect of change in accounting principle                                       |  |                       |        |   |             | $ | (7.50   | )                                                    | 
|                                                                                          |  |                       |        |   |             |   |         |                                                      | 
|Net loss                                                                                  |  | $                     | (0.90  | ) |             | $ | (7.50   | )                                                    | 
|                                                                                          |  |                       |        |   |             |   |         |                                                      | 



A summary of the significant effects
of the restatements on the Companys condensed consolidated statement of operations for the three months ended March 31, 2003 is as follows (in thousands, except per share amounts):



|                                                              |  | As originallyreported |         |   | Adjustments |   |        | As restated inForm 10-Qfor periodendedMarch 31, 2003 | 
|------------------------------------------------------------- |  | --------------------- | ------- | - | ----------- | - | ------ | ---------------------------------------------------- | 
|Loss from continuing operations                               |  | $                     | (3,078  | ) |             | $ | (169   | )                                                    | 
|Income (loss) from discontinued operations, net of income tax |  |                       | (18,297 | ) |             |   | 18,598 |                                                      | 
|                                                              |  |                       |         |   |             |   |        |                                                      | 
|Net loss                                                      |  | $                     | (21,375 | ) |             | $ | 18,429 |                                                      | 
|                                                              |  |                       |         |   |             |   |        |                                                      | 
|Loss per share (basic and assuming dilution)                  |  |                       |         |   |             |   |        |                                                      | 
|From continuing operations                                    |  | $                     | (0.36   | ) |             | $ | (0.02  | )                                                    | 
|From discontinued operations                                  |  |                       | (2.13   | ) |             |   | 2.17   |                                                      | 
|                                                              |  |                       |         |   |             |   |        |                                                      | 
|Net loss                                                      |  | $                     | (2.49   | ) |             | $ | 2.15   |                                                      | 
|                                                              |  |                       |         |   |             |   |        |                                                      | 



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A summary of the significant effects of the restatements on the Companys condensed consolidated balance sheet as of
December 31, 2002 is as follows (in thousands):



|                                   |  | As originallyreported |         | Adjustments |   |         | As restated inForm 10-Kfor periodendedDec. 31, 2002
|---------------------------------- |  | --------------------- | ------- | ----------- | - | ------- | ---------------------------------------------------
|Assets                             |  |                       |         |             |   |         |                                                    
|Goodwill, net                      |  | $                     | 189,133 |             | $ | (99,035 | )                                                  
|Total assets                       |  | $                     | 640,026 |             | $ | (99,035 | )                                                  
|                                   |  |                       |        
|Liabilities                        |  |                       |         |             |   |         |                                                    
|Accrued payroll and other benefits |  | $                     | 6,505   |             | $ | 389     |                                                    
|Accrued retirement benefits        |  | $                     | 18,412  |             | $ | 681     |                                                    
|Deferred income taxes              |  | $                     | 63,167  |             | $ | (35,051 | )                                                  
|                                   |  |                       |        
|Stockholders equity               |  |                       |         |             |   |         |                                                    
|Retained earnings                  |  | $                     | 156,732 |             | $ | (65,054 | )                                                  
|Total stockholders equity         |  | $                     | 237,789 |             | $ | (65,054 | )                                                  



A summary of the significant effects
of the restatements on the Companys condensed consolidated balance sheet as of March 31, 2003 is as follows (in thousands):



|                                                                   |  | As originallyreported |         |   | Adjustments |   |         | As restated inForm 10-Qfor periodendedMarch 31, 2003 | 
|------------------------------------------------------------------ |  | --------------------- | ------- | - | ----------- | - | ------- | ---------------------------------------------------- | 
|Assets                                                             |  |                       |         |   |             |   |         |                                                      | 
|Prepaid income taxes                                               |  | $                     | 4,905   |   |             | $ | (4,905  | )                                                    | 
|Goodwill, net                                                      |  | $                     | 134,161 |   |             | $ | (67,575 | )                                                    | 
|Noncurrent assets held for sale                                    |  | $                     | 29,920  |   |             | $ | 2,153   |                                                      | 
|Total assets                                                       |  | $                     | 574,373 |   |             | $ | (70,327 | )                                                    | 
|                                                                   |  |                       |        
|Liabilities                                                        |  |                       |         |   |             |   |         |                                                      | 
|Accrued payroll and other benefits                                 |  | $                     | 7,517   |   |             | $ | 1,275   |                                                      | 
|Accrued retirement benefits                                        |  | $                     | 17,024  |   |             | $ | 493     |                                                      | 
|Deferred income taxes                                              |  | $                     | 49,899  |   |             | $ | (24,817 | )                                                    | 
|Other liabilities                                                  |  | $                     | 5,884   |   |             | $ | (1,063  | )                                                    | 
|                                                                   |  |                       |        
|Stockholders equity                                               |  |                       |         |   |             |   |         |                                                      | 
|Accumulated other comprehensive income - minimum pension liability |  | $                     | (2,183  | ) |             | $ | 410     |                                                      | 
|Retained earnings                                                  |  | $                     | 135,357 |   |             | $ | (46,625 | )                                                    | 
|Total stockholders equity                                         |  | $                     | 214,979 |   |             | $ | (46,215 | )                                                    | 



In addition to the restatements
discussed above, December 31, 2002 balance sheet amounts reported in the accompanying condensed consolidated financial statements have been revised to reclassify the assets and liabilities of the Georgia television stations and the Portland radio
stations as Assets and Liabilities held for sale as required by Statement of Financial Accounting Standards No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets.



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3. New accounting pronouncements



In May 2002, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 145
Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections (FAS 145). FAS 145, which updates, clarifies, and simplifies existing accounting pronouncements became effective for the
Companys 2003 financial statements. Accordingly, a loss from extinguishment of long-term debt reported by the Company as an extraordinary item in the 2002 financial statements has been reclassified to continuing operations.



On January 1, 2003, the Company adopted FASB Statement No. 143, Accounting for Asset
Retirement Obligations (FAS 143). This statement requires entities to record the fair value of future liabilities for asset retirement obligations as an increase in the carrying amount of the related long-lived asset if a reasonable estimate
of fair value can be made. Over time, the liability is accreted to its present value, and the capitalized cost is depreciated over the useful life of the related asset. The Company has certain legal obligations, principally related to leases on
locations used for broadcast system assets, which fall within the scope of FAS 143. These legal obligations include a responsibility to remediate the leased sites on which these assets are located. The Company has concluded that the adoption of FAS
143 does not have a material impact on the Companys financial statements.



In February 2003, the Company adopted FASB Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46). FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest entitys activities or entitled to receive a majority of the entitys residual returns or both. FIN 46 also requires disclosures about variable interest entities that a company is not
required to consolidate but in which it has a significant variable interest. The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003. Adoption of this portion of the interpretation did
not have a material impact on the Companys financial statements. The consolidation requirements apply to existing entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply
in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The impact of adoption of this portion of the interpretation is not expected to have a material impact on the companys
financial statements.



4. Discontinued
operations



In October 2002, the Companys real estate subsidiary
concluded the sale of one industrial property. In December 2002, the real estate subsidiary concluded the sale of three industrial properties. The properties that were sold meet the criteria of a component of an entity as defined in FASB
Statement No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets (FAS 144). In accordance with the provisions of FAS 144, the results of operations of the properties sold are reported as discontinued operations in the
accompanying financial statements.



The loss from discontinued operations of
the real estate sold for the three months ended March 31, 2002 is summarized as follows (in thousands):



|Income from discontinued operations: |  |   |    |  
|------------------------------------ |  | - | -- | -
|Before income taxes                  |  | $ | 19 |  
|Income tax effect                    |  |   | (7 | )
|                                     |  |   |    |  
|                                     |  | $ | 12 |  
|                                     |  |   |    |  



Revenue of the real estate sold
amounted to $959,000 in the three months ended March 31, 2002. Gain on sale of the real estate sold in October and December 2002 amounted to $7,203,000 after income taxes, and was reported in the fourth quarter of 2002.



On January 29, 2003, the broadcasting subsidiary signed an asset purchase agreement for the
sale of its two Georgia television stations, WFXG-TV, Augusta and WXTX-TV, Columbus, for a purchase price of $40 million plus working capital. Completion of the sale is subject to FCC approval, receipt of consents to assignment of certain material
agreements, and satisfaction of other customary closing conditions. The sale is expected to be completed in 2003. The stations to be sold meet the criteria of a component of an entity as



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defined in FAS 144. In accordance with the provisions of FAS 144, the results of operations of the stations through the date of completion of the sale are
reported as discontinued operations in the accompanying financial statements. The prior period results of operations of the stations to be sold have been reclassified to conform to the 2003 presentation.



The income from discontinued operations of the television stations to be sold is summarized
as follows (in thousands):



|                                     |  | Three months endedMarch 31 |     
|------------------------------------ |  | -------------------------- | ----
|                                     |  | 2003                       |     
|                                     |  | (Unaudited)                |     
|Income from discontinued operations: |  |                            |     
|Before income taxes                  |  | $                          | 464 
|Income tax effect                    |  |                            | (163
|                                     |  |                            |     
|                                     |  | $                          | 301 
|                                     |  |                            |     



Revenue of the stations to be sold
amounted to $2,060,000 and $1,868,000 in the three months ended March 31, 2003 and 2002, respectively.



5. Derivative instruments



The Company is a party to a variable forward sales transaction (Forward Transaction) with a financial institution. The Companys obligations under the
Forward Transaction are collateralized by 3,000,000 shares of SAFECO Corporation common stock owned by the Company. A portion of the Forward Transaction is considered a derivative and, as such, the Company periodically measures its fair value and
recognizes the derivative as an asset or a liability. The change in the fair value of the derivative is recorded in the income statement. The Company may in the future designate the Forward Transaction as a hedge and, accordingly, the change in fair
value will be recorded in the income statement or in other comprehensive income depending on its effectiveness. The Company may borrow up to $70,000,000 under the Forward Transaction. The Forward Transaction will mature in five separate six-month
intervals beginning March 15, 2005 through March 15, 2007. The amount due at each maturity date will be determined based on the market value of SAFECO common stock on such maturity date. Although the Company will have the option of settling the
amount due in cash, or by delivery of shares of SAFECO common stock, the Company currently intends to settle in cash rather than by delivery of shares. The Company may prepay amounts due in connection with the Forward Transaction. During the term of
the Forward Transaction, the Company will continue to receive dividends paid by SAFECO; however, any increase in the dividend amount above the present rate must be paid to the financial institution that is a party to the Forward Transaction. At
March 31, 2003 the derivative portion of the Forward Transaction had a fair market value of $4,335,000. At March 31, 2003, $50,913,000 was outstanding under the Forward Transaction including accrued interest amounting to $4,461,000. Subsequent to
March 31, 2003, the Company made a payment of $5,000,000 on the Forward Transaction.



In March 2002, the broadcasting subsidiary entered into an interest rate swap agreement fixing the interest rate at 6.87%, plus a margin based on the broadcasting subsidiarys ratio of consolidated funded debt to consolidated EBITDA,
on a portion of the floating rate debt outstanding under the broadcast facility. The notional amount of the swap is $65,000,000, which reduces as payments are made on principal outstanding under the broadcast facility, until termination of the
contract in March 2004. At March 31, 2003 the fair market value of the swap agreement was a liability of $3,644,000.



Changes in the fair market value of the Forward Transaction and the interest rate swap agreement are included in Net loss on derivative instruments in the accompanying
condensed consolidated financial statements.



6. Television and radio broadcast rights and other commitments:



The
broadcasting subsidiary acquires television and radio broadcast rights, and at March 31, 2003 has commitments under license agreements amounting to $72,367,000 for future rights to broadcast television and radio programs through 2008, and
$11,574,000 in related fees. As these programs will not be available for broadcast until after March 31, 2003, they have been excluded from the financial statements. In addition, the broadcasting subsidiary has commitments under a Joint Sales
Agreement totaling $13,029,000 through 2007.



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7. Income (loss) per share:



Net income (loss) per share represents net income (loss) divided by the weighted average
number of shares outstanding during the year. Net income (loss) per share assuming dilution represents net income (loss) divided by the weighted average number of shares outstanding, including the potentially dilutive impact of the stock options and
restricted stock rights issued under the Companys incentive plans. Common stock options and restricted stock rights are converted using the treasury stock method.



The weighted average number of shares outstanding during the three months ended March 31, 2003 was 8,594,060. The dilutive effect of 1,504
restricted stock rights and options to purchase 422,798 shares are excluded for the three months ended March 31, 2003 because such rights and options were anti-dilutive.



The weighted average number of shares outstanding during the three months ended March 31, 2002 was 8,591,658. The dilutive effect of 3,612
restricted stock rights and options to purchase 441,161 shares are excluded for the three months ended March 31, 2002 because such rights and options were anti-dilutive.



8. Stock-based compensation:



The Company accounts for common stock options and restricted common stock rights in accordance with Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees, and related interpretations. No stock-based compensation is reflected in net loss, as all options granted had an exercise price equal to the market value of the underlying common stock on the date of
grant. The following table illustrates the effect on net loss and net loss per share if the Company had applied the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, to stock-based employee
compensation (in thousands, except per share amounts):



|                                                                                                                                                     |  | Three months endedMarch 31 |       
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------
|                                                                                                                                                     |  | 2003                       |       
|                                                                                                                                                     |  | (Unaudited)                |       
|Net loss, as restated                                                                                                                                |  | $                          | (2,946
|Deduct total stock-based employee compensation expense determined under the fair value based method for all awards, net of related
income tax effect |  |                            | (148  
|                                                                                                                                                     |  |                            |       
|Adjusted net loss                                                                                                                                    |  | $                          | (3,094
|                                                                                                                                                     |  |                            |       
|Loss per share:                                                                                                                                      |  |                            |       
|As restated                                                                                                                                          |  | $                          | (0.34 
|Adjusted                                                                                                                                             |  | $                          | (0.36 
|                                                                                                                                                     |  |                           
|Loss per share assuming dilution:                                                                                                                    |  |                            |       
|As restated                                                                                                                                          |  | $                          | (0.34 
|Adjusted                                                                                                                                             |  | $                          | (0.36 



9.
Segment information:



The Company operates its continuing operations as three
principal business units: broadcasting, media services, and real estate. The Company has previously reported its television and radio operations as one reportable segment called Broadcasting. The Company also previously reported Fisher
Plaza and the all other category as one reportable segment called Media Services. The information reported for the three-month periods ended March 31, 2003 and 2002 has been restated to reflect the appropriate reportable
segments pursuant to Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information (FAS 131) and to reflect reclassification of discontinued operations.



Under the provisions of FAS 131, the Company reports financial data for four reportable
segments: television, radio (included in the broadcasting business unit), Fisher Plaza (included in the media services business unit),



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and real estate, and a remaining all other category. The television reportable segment includes the operations of the Companys nine
network-affiliated television stations (excluding the Georgia television stations, which are included in discontinued operations), and a 50% interest in a company that owns a tenth television station. The radio reportable segment includes the
operations of the Companys 27 radio stations (excluding the Portland radio stations, which are included in discontinued operations). Corporate expenses of the broadcasting business unit are allocated to the television and radio reportable
segments based on a ratio that approximates historic revenue and operating expenses of the segments. The Fisher Plaza reportable segment includes the operations of a communications center located in Seattle that serves as home of the Companys
Seattle television and radio operations, the Companys corporate offices, and third-parties. The real estate reportable segment includes the Companys proprietary commercial real estate and property management operations. The operations of
Fisher Pathways, Inc., a provider of satellite transmission services, Fisher Entertainment LLC, a producer of content for cable and television and Civia, Inc., which are also included in the media services business unit, as well as the expenses of
Fisher Media Services Companys corporate group, are included in an all other category.



Revenue for each reportable segment is as follows (in thousands):



|                           |  | Three months endedMarch 31 |       
|-------------------------- |  | -------------------------- | ------
|                           |  | 2003                       |       
|                           |  | (Unaudited)                |       
|Television                 |  | $                          | 20,185
|Radio                      |  |                            | 8,619 
|Fisher Plaza               |  |                            | 2,508 
|Real estate                |  |                            | 2,057 
|All other                  |  |                            | 1,590 
|Corporate and eliminations |  |                            | (165  
|                           |  |                            |       
|                           |  | $                          | 34,794
|                           |  |                            |       



Intersegment revenue is reflected in
the corporate and eliminations category in the table above.



Income (loss) from
continuing operations before interest and income taxes for each reportable segment is as follows (in thousands):



|                                                                           |  | Three months endedMarch 31 |       
|-------------------------------------------------------------------------- |  | -------------------------- | ------
|                                                                           |  | 2003Restated               |       
|                                                                           |  | (Unaudited)                |       
|Television                                                                 |  | $                          | (409  
|Radio                                                                      |  |                            | (1,989
|Fisher Plaza                                                               |  |                            | 1,732 
|Real estate                                                                |  |                            | 2,030 
|All other                                                                  |  |                            | (1,088
|Corporate and eliminations                                                 |  |                            | (2    
|                                                                           |  |                            |       
|Total segment income (loss) from continuing operations before income taxes |  |                            | 274   
|Interest expense                                                           |  |                            | (5,536
|                                                                           |  |                            |       
|Consolidated loss from continuing operations before income taxes           |  | $                          | (5,262
|                                                                           |  |                            |       



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Identifiable assets for each segment are as follows (in thousands):



|                             |  | March 312003Restated |         | December 312002Restated
|---------------------------- |  | -------------------- | ------- | -----------------------
|                             |  | (Unaudited)         
|Television                   |  | $                    | 89,057  |                        
|Radio                        |  |                      | 73,882  |                        
|Fisher Plaza                 |  |                      | 120,791 |                        
|Real estate                  |  |                      | 48,702  |                        
|All other                    |  |                      | 4,675   |                        
|Corporate and eliminations   |  |                      | 131,175 |                        
|                             |  |                      |         |                        
|Continuing operations        |  |                      | 468,282 |                        
|Discontinued operations, net |  |                      | 35,764  |                        
|                             |  |                      |         |                        
|                             |  | $                    | 504,046 |                        
|                             |  |                      |         |                        



Identifiable assets by reportable
segment are those assets used in the operations of each segment. Corporate assets are principally marketable securities.



10. Other commitments:



In connection with a review of strategic alternatives conducted during the fall of 2002 and winter of 2003, the Company entered into agreement with certain officers and
employees, which require payments of $3,844,000 in January 2004 if the officers and employees continue their employment until that date. The Company is recognizing the cost of this obligation over the period covered by the agreements and, as of
March 31, 2003, $1,275,000 was accrued. General and administrative expenses in the three months ended March 31, 2003 include $886,000 related to these agreements. The agreements also provide that if a change in control should occur, certain officers
will receive severance payments totaling approximately $2,100,000, as well as health and welfare benefits. The Company will recognize this obligation when it is probable the executives are entitled to the benefits.



11. Reclassifications:



Certain prior-period balances have been reclassified to conform to the current-period
presentation. Such reclassifications had no effect on operating results.



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ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS



The following discussion and analysis should be read in conjunction with the Financial
Statements and related Notes thereto included elsewhere in this quarterly report on Form 10-Q. Some of the statements in this quarterly report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include all passages containing verbs such as `aims, anticipates, believes, estimates, expects, hopes, intends, plans, predicts, projects or targets or nouns corresponding to such verbs. Forward-looking statements
also include any other passages that are primarily relevant to expected future events or that can only be fully evaluated by events that will occur in the future. There are many risks and uncertainties that could cause actual results to differ
materially from those predicted in our forward-looking statements, including, without limitation, those factors discussed under the caption Additional Factors That May Affect Our Business, Financial Condition And Future Results, and
those discussed in our annual report on Form 10-K for the year ended December 31, 2002. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation
to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made in this report and in our other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations. As used herein, unless the context requires otherwise, when we say
we, us, our, or the Company, we are referring to Fisher Communications, Inc. and its consolidated subsidiaries.



This discussion is intended to provide an analysis of significant trends and material changes in our financial position and operating
results during the three month period ended March 31, 2003 compared with the similar period in 2002.



In October 2002, our real estate subsidiary concluded the sale of the subsidiarys Fisher Commerce Center industrial property. Net proceeds from the sale were $8,993,000. In December 2002 the subsidiary concluded
the sale of three industrial properties. Net proceeds from the sale were $37,510,000. The results of operations of the properties sold in October and December 2002 are reported as discontinued operations for the three months ended March 31, 2002 in
the accompanying condensed consolidated financial statements.



On January 29,
2003, the broadcasting subsidiary signed an asset purchase agreement for the sale of its two Georgia television stations, WFXG-TV, Augusta and WXTX-TV, Columbus, for a purchase price of $40 million plus working capital. Completion of the sale is
subject to FCC approval, receipt of consents to assignment of certain material agreements, and satisfaction of other customary closing conditions. The sale is expected to be completed in 2003. The stations to be sold meet the criteria of a
component of an entity as defined in FASB Statement No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets (FAS 144). In accordance with the provisions of FAS 144, the results of operations of the stations
through the date of completion of the sale are reported as discontinued operations in the accompanying condensed consolidated financial statements. The prior period results of operations of the stations to be sold have been reclassified to conform
to the 2003 presentation.



In connection with our ongoing corporate
restructuring, we expect to discontinue operations at Fisher Properties and Fisher Media Services during 2003. In particular, we expect to sell the remaining two commercial properties at Fisher Properties, West Lake Union Center and Fisher Business
Center, plus the property management operation. In addition, we expect that the media services businesses of Fisher Entertainment, Fisher Pathways, and Civia will either be sold, absorbed into our broadcasting operations, or shut down. We expect
that such actions will reduce the revenue, operating expenses, depreciation, and income or loss attributable to our media services and real estate business units.



Percentage comparisons have been omitted within the following tables where they are not considered meaningful.



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CRITICAL ACCOUNTING POLICIES



The SEC has defined a companys critical accounting policies as the ones that are most important to the portrayal of the companys
financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we
have identified our critical accounting policies below. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results. For a detailed discussion on the
application of these and other accounting policies, see Note 1 to the Consolidated Financial Statements contained in our annual report on Form 10-K for the year ended December 31, 2002.



Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.



Allowance for doubtful accounts. We evaluate the collectibility of our accounts receivable based on a combination of factors. In circumstances where we are aware of a specific customers inability to meet its financial
obligations, we record a specific reserve to reduce the amounts recorded to what we believe will be collected. For all other customers, we recognize reserves for bad debts based on historical experience of bad debts as a percent of accounts
receivable for each business unit, adjusted for relative improvements or deteriorations in the aging and changes in current economic conditions.



Television and radio broadcast rights. Television and radio broadcast rights are recorded as assets when the license period begins and the programs are available
for broadcasting, at the gross amount of the related obligations. Costs incurred in connection with the purchase of programs to be broadcast within one year are classified as current assets, while costs of those programs to be broadcast after one
year are considered noncurrent. The costs are charged to operations over their estimated broadcast periods using the straight-line method. Program obligations are classified as current or noncurrent in accordance with the payment terms of the
license agreement. Costs of programs which are not available for broadcast are not recorded as assets and are disclosed as commitments.



Accounting for derivative instruments. We utilize an interest rate swap in the management of our variable rate exposure. The interest rate swap is held at fair
value with the change in fair value being recorded in the statement of income.



We entered into a variable forward sales transaction with a financial institution. Our obligations under the Forward Transaction are collateralized by 3,000,000 shares of SAFECO Corporation common stock owned by us. A portion of the Forward
Transaction will be considered a derivative and, as such, we will periodically measure its fair value and recognize the derivative as an asset or a liability. The change in the fair value of the derivative is recorded in the income statement. We may
in the future designate the Forward Transaction as a hedge and, accordingly, the change in fair value will be recorded in the income statement or in other comprehensive income depending on its effectiveness.



Goodwill and long-lived assets. Goodwill represents the excess of purchase price of
certain broadcast properties over the fair value of tangible and identifiable intangible net assets acquired and is accounted for under the provisions of Statement of Financial Accounting Standards No. 142 (FAS 142), which we adopted as of January
1, 2002. Under FAS 142, goodwill and intangible assets with indefinite useful lives are no longer amortized but are tested for impairment at least on an annual basis.



The goodwill impairment test involves a comparison of the fair value of each of our reporting units, with the carrying amounts of net
assets, including goodwill, related to each reporting unit. If the carrying amount exceeds a reporting units fair value, the second step of the impairment test is performed to measure the amount of impairment loss, if any. The impairment loss
is measured based on the amount by which the carrying amount of goodwill exceeds the implied fair value of goodwill in the reporting unit being tested. Fair values are determined based on valuations that rely primarily on the discounted cash flow
method. This method uses future projections of cash flows from each of our reporting units and includes, among other estimates, projections of future advertising



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revenue and operating expenses, market supply and demand, projected capital spending and an assumption of our weighted average cost of capital. To the extent
they have been separately identified, our indefinite-lived assets (broadcast licenses) are tested for impairment on an annual basis by applying a fair-value-based test as required by FAS 142. Our evaluations of fair values include analyses based on
the future cash flows generated by the underlying assets, estimated trends and other relevant determinants of fair value for these assets. If the fair value of the asset determined is less than its carrying amount, a loss is recognized for the
difference between the fair value and its carrying value. Changes in any of these estimates, projections and assumptions could have a material effect on the fair value of these assets in future measurement periods and result in an impairment of
goodwill or indefinite-lived intangibles which could materially affect our results of operations.



We evaluate the recoverability of the carrying amount of long-lived tangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable as required by
Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (FAS 144). We use our judgment when applying the impairment rules to determine when an impairment test is necessary.
Factors we consider which could trigger an impairment review include significant underperformance relative to historical or forecasted operating results, a significant decrease in the market value of an asset, a significant change in the extent or
manner in which an asset is used, and significant negative cash flows or industry trends.



Impairment losses are measured as the amount by which the carrying value of an asset exceeds its estimated fair value, which is based on future discounted cash flows. In estimating these future cash flows we use
future projections of cash flows directly associated with and that were expected to arise as a direct result of the use and eventual disposition of the assets. These projections rely on significant assumptions. If it is determined that a long-lived
asset is not recoverable, an impairment loss would be calculated based on the excess of the carrying amount of the long-lived asset over its fair value, primarily determined based on discounted cash flows. Changes in any of our estimates could have
a material effect on the estimated future cash flows expected to be generated by the asset and result in a future impairment of the involved assets with a material effect on our future results of operations.



Pension benefits. We maintain a noncontributory supplemental retirement program for
key management. We also maintained a qualified defined benefit plan covering our non-broadcasting employees, which ceased accruing benefit in 2001 with plan assets distributed to participants between 2001 and the first half of 2003. The cost of
these plans is reported and accounted for in accordance with Financial Accounting Standards Board Statements 87, 88 and 132. These Statements require significant assumptions regarding discount rates, salary increases and asset returns. We believe
that our estimates are reasonable for these key actuarial assumptions; however future actual results will likely differ from our estimates, and these differences could materially affect our future results of operation either unfavorably or
favorably.



RESTATEMENT



Gain on Sale of Real Estate - The Companys real estate subsidiary did not
properly record in the first quarter of 2003 a gain resulting from a sale of real estate. Because a substantial portion of the proceeds from a real estate sale that occurred in 2000 were in the form of an installment note, a portion of the gain on
that sale was deferred and was to be recognized as the note was collected. The balance of the note was received in full in March 2003, and the previously deferred gain (included in Other liabilities) amounting to $1,063,000 should have been
recognized in income at that time. The Company has revised its financial statements for the three months ended March 31, 2003 to include the gain on the sale, net of income taxes, in its results of operations. Accordingly, net loss for the three
months ended March 31, 2003 was decreased by $677,000.



Goodwill
Impairment - Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142 Goodwill and Other Intangible Assets (FAS 142). FAS 142 requires the Company to test goodwill and intangible assets for
impairment upon adoption and to test goodwill at least annually, or whenever events indicate that an impairment may exist. Upon the adoption of FAS 142, the Company, with the concurrence of its independent auditors, concluded there was no impairment
of goodwill. Subsequent to the issuance of the Companys consolidated financial statements as of and for the year ended December 31, 2002 and the unaudited condensed consolidated financial statements as of March 31, 2003 and for the three
months then ended, the Company and the independent auditors determined that in performing the Companys initial impairment test, the level (reporting unit) at which the Company should assess goodwill for impairment had been incorrectly
identified. The Company has determined that the impairment test should have been conducted at the operating segment level,



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which consists and requires separate assessment, with respect to the broadcast operations, of each of the Companys ten television and radio station
groups. As a result of the reassessment of the reporting unit, the Company reperformed the first step of the transitional impairment test, which indicated that impairment existed. Completion of the second step of the transitional impairment test
resulted in a pre-tax goodwill impairment charge of $99,035,000 related to five television reporting units and a related tax benefit of $34,662,000 (as the aforementioned goodwill was deductible for tax purposes). The required annual impairment test
was also reperformed based on the new determination of reporting units, resulting in no further impairment.



As required by the transition provisions of FAS 142, the net loss of $64,373,000 resulting from the reperformed transitional test is recorded as the cumulative effect of a change in accounting principle in the
accompanying condensed consolidated financial statements for the three months ended March 31, 2002. This restatement item has no effect on the Companys previously reported revenues and cash flows.



On January 29, 2003, the Companys broadcasting subsidiary signed an asset purchase
agreement for the sale of its two Georgia television stations (see Note 4 to the condensed consolidated financial statements), and recognized an impairment loss on the sale amounting to $28,613,000, offset by a related tax benefit of $10,015,000.
The estimated loss was originally reported in the three months ended March 31, 2003; however, because the aforementioned goodwill impairment loss significantly reduced the goodwill balances pertaining to the Georgia television stations, the Company
has restated its financial statements for the three months ended March 31, 2003 to eliminate the impairment loss on sale. As a result, net loss for the quarter ended March 31, 2003 was decreased by $18,598,000.



Retention Bonus - Subsequent to the issuance of the Companys consolidated
financial statements as of and for the year ended December 31, 2002 and the unaudited condensed consolidated financial statements as of March 31, 2003 and for the three months then ended, the Company concluded that certain obligations for retention
bonuses entered into in the fourth quarter of 2002 and described in Note 10 to these unaudited condensed consolidated financial statements should have been accrued over the service period specified in the related retention agreements. Accordingly,
the Company revised its financial statements for the year ended December 31, 2002 to record an obligation of $389,000 and related tax effects in the fourth quarter of 2002. Net loss for the year ended December 31, 2002 was increased by $248,000. The
Company also revised its financial statements for the three months ended March 31, 2003 to record an additional liability of $886,000 and related tax effects. Net loss for the quarter ended March 31, 2003 was increased by $564,000. This adjustment
does not impact the three months ended March 31, 2002.



Pension Plan -
In addition, subsequent to the issuance of the consolidated financial statements as of and for the year ended December 31, 2002 and the unaudited condensed consolidated financial statements as of March 31, 2003 and for the three months then ended,
the Company concluded that certain pension-related expenses should have been recorded in the first quarter of 2003 and in prior periods.



The Company had a defined-benefit plan for all non-broadcasting employees. Benefit accruals under this plan ceased in July 2001 and plan assets were distributed to
participants between 2001 and the first half of 2003. Certain settlement losses relating to the distribution of plan assets should have been recognized in 2002 and in the first quarter of 2003. In addition, the Company determined that additional
pension benefits paid in 2003 to certain retired participants who worked beyond their normal retirement age (Late Retirees) had not been recognized over periods in which those employees provided services. Accordingly, the Company revised
its financial statements to record the settlement losses and the additional obligation to Late Retirees (cumulatively, the Pension Adjustments). The impact of recording the Pension Adjustments also had the effect of reducing Retained
Earnings by $433,000 as of December 31, 2002, increasing Accrued Retirement Benefits by $681,000, and reducing Deferred Income Tax Liabilities by $248,000 to reflect the pension liability and expenses that should have been recorded as of that date.
Pension adjustments to record the additional expenses that should have been recognized from January 1, 2000 through December 31, 2002 were recorded in the fourth quarter of 2002 and amounted to $134,000 after taxes. Amounts related to 2000, 2001,
and the first three quarters of 2002, totaling $6,000, net of taxes, were not significant in relation to the fourth quarter of 2002 or to the prior periods. The impact of recording the Pension Adjustments for the first quarter of 2003 was an
increase in net loss for the quarter of $282,000.



See Note 2 to the condensed
consolidated financial statements for a summary of the significant effects of the restatements on the Companys condensed consolidated statements of operations for the three months ended March 31, 2003 and 2002, and the condensed consolidated
balance sheets as of March 31, 2003 and December 31, 2002.



Segment
Reporting - As further discussed in Note 9 to the accompanying condensed consolidated financial statements, the Company restated its reportable segments to present the previously reported broadcasting segment as two reportable segments:
television and radio. In addition, the previously reported media services segment is presented as the Fisher Plaza segment with the remaining operations in an all other category. The segmental disclosures for comparable periods have been restated to
conform to this presentation.



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Cash Flows  Proceeds from sale of marketable securities amounting to $5,169,000 and proceeds from collection
of an installment note receivable from the sale of real estate amounting to $3,185,000, originally included in cash flows provided by operating activities, have been reclassified to cash provided by investing activities in the accompanying condensed
consolidated statement of cash flows for the three months ended March 31, 2003. This reclassification has no effect on net income or loss, but decreased cash flows from operating activities by $8,354,000 and increased cash flows from investing
activities by the same amount.



CONSOLIDATED RESULTS OF OPERATIONS



As restated, operating results for the three months ended March 31, 2003
showed a consolidated loss of $2,946,000 including income from discontinued operations amounting to $301,000. As restated, net loss for the three months ended March 31, 2002 was $72,131,000 including an after-tax charge of $64,373,000 representing
the cumulative effect of change in accounting principle, and income from discontinued operations amounting to $276,000.



Revenue



|Three months ended March 31 |  | 2003 |            |   | % Change |       |   | 2002 |  
|--------------------------- |  | ---- | ---------- | - | -------- | ----- | - | ---- | -
|Television                  |  | $    | 20,185,000 |   |          | 4.2   | % |      | $
|Radio                       |  |      | 8,619,000  |   |          | 0.2   | % |      |  
|Fisher Plaza                |  |      | 2,508,000  |   |          | 135.2 | % |      |  
|Real estate                 |  |      | 2,057,000  |   |          | -13.1 | % |      |  
|All other                   |  |      | 1,590,000  |   |          | 151.3 | % |      |  
|Corporate and eliminations  |  |      | (165,000   | ) |          | -12.9 | % |      |  
|                            |  |      |            |   |          |       |   |      |  
|Consolidated                |  | $    | 34,794,000 |   |          | 9.2   | % |      | $



First quarter 2003 television
revenues, net of sales commissions, increased $810,000, compared with the same period last year. Net revenue from overall radio operations was essentially unchanged compared with first-quarter 2002.



Our Seattle and Portland television stations experienced revenue increases of 1% and 6%,
respectively. Based on information published by Miller, Kaplan, Arase & Co. (Miller Kaplan), revenue for the overall Seattle television market increased 4% during first quarter of 2003, and revenue for the overall Portland television market
decreased 3%. Our smaller market television operations experienced increased revenues ranging from 1% to 28%, except for KBCI in Boise, Idaho, which experienced a decline of 1%.



First quarter revenue at our small market radio stations in Eastern Washington and Montana increased 12%. Revenue at Seattle and Portland
radio operations declined 3% and 6%, respectively. Miller Kaplan reported that, for the first quarter of 2003, radio revenues for the Seattle market increased 5%, and revenues for the Portland radio market increased 6%.



The increase in revenue at Fisher Plaza, is primarily due to a significant penalty received
from a tenant for early termination of premises agreements.



The comparison of
real estate revenue is impacted by rents from the Lake Union properties which are included in results for the first quarter of 2002, but are not included in 2003 as the property was sold in September 2002.



The increase in revenue for the all other category in 2003 is primarily due to increased
revenue from program production and development at Fisher Entertainment and, to a lesser extent, increased revenue at Fisher Pathways.



Corporate and eliminations includes the elimination of management fees recognized as revenue by the real estate segment, which are reported as operating expenses by the
Fisher Plaza segment. There is no impact on net income or loss as such amounts are eliminated in the condensed consolidated financial statements.



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Cost of services sold



|Three months ended March 31 |  | 2003 |            |   | % Change |       |   | 2002 |  
|--------------------------- |  | ---- | ---------- | - | -------- | ----- | - | ---- | -
|Television                  |  | $    | 10,879,000 |   |          | -1.9  | % |      | $
|Radio                       |  |      | 4,362,000  |   |          | 11.8  | % |      |  
|Fisher Plaza                |  |      | 356,000    |   |          | 26.2  | % |      |  
|Real estate                 |  |      | 341,000    |   |          | -21.5 | % |      |  
|All other                   |  |      | 1,416,000  |   |          | 449.4 | % |      |  
|Corporate and eliminations  |  |      | 140,000    |   |          | -38.6 | % |      |  
|                            |  |      |            |   |          |       |   |      |  
|Consolidated                |  | $    | 17,494,000 |   |          | 8.0   | % |      | $
|                            |  |      |           
|Percentage of revenue       |  |      | 50.3       | % |          |       |   |      |  



The cost of services sold consists
primarily of costs to acquire, produce, promote, and broadcast television and radio programming, operating costs of Fisher Plaza, costs to operate the properties held by the real estate segment, and operating costs of the businesses included in the
all other category. These costs are relatively fixed in nature, and do not necessarily vary on a proportional basis with revenue.



Overall operating expenses at the television segment for first quarter of 2003 declined modestly compared with the first quarter of 2002, as increases in a number of
expense categories at our television stations were more than offset by a reduction in the cost of syndicated programming.



The increase in operating expenses for the radio segment for the first quarter of 2003, compared with the first quarter of 2002, is primarily due to increased operating
costs reported by our Seattle radio operations as a result of the 24 hour news format adopted by KOMO AM in the fall of 2002 and additional costs associated with the broadcast of Seattle Mariners baseball.



The increase in operating expenses at Fisher Plaza is principally due to increases in
insurance, utilities, and other operating costs.



The decline in real estate
operating expenses relates primarily to costs of operating the Lake Union properties during the first quarter of 2002. Those properties were sold in the fall of 2002 and, therefore, are excluded from 2003 results.



The increase in operating expenses in the all other category is principally due to increased
costs related to program production and development at Fisher Entertainment.



Corporate and eliminations includes the elimination of certain operating expenses between reportable segments, primarily management fees reported as operating expenses by the Fisher Plaza segment, which are recognized as revenue by the real
estate segment. There is no impact on net income as such amounts are eliminated in the condensed consolidated financial statements.



Selling expenses



|Three months ended March 31 |  | 2003 |           |   | % Change |      |   | 2002 |  
|--------------------------- |  | ---- | --------- | - | -------- | ---- | - | ---- | -
|Television                  |  | $    | 2,660,000 |   |          | 26.7 | % |      | $
|Radio                       |  |      | 3,539,000 |   |          | 66.3 | % |      |  
|All other                   |  |      | 167,000   |   |          | 41.1 | % |      |  
|                            |  |      |           |   |          |      |   |      |  
|Consolidated                |  | $    | 6,366,000 |   |          | 46.5 | % |      | $
|                            |  |      |          
|Percentage of revenue       |  |      | 18.3      | % |          |      |   |      |  



The increase in selling expenses at
our television segment in the first quarter of 2003, compared with the first quarter of 2002, is principally due to increased salaries, sales commissions, and promotion expense.



The increase in selling expenses at our radio segment in the first quarter of 2003, compared with the first quarter of 2002, is principally
due to costs incurred at Seattle radio operations in connection with a joint sales agreement that became effective in March 2002, and additional sales personnel and other costs related to the rights agreement to broadcast Seattle Mariners baseball
games on KOMO AM.



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The increase in selling expenses in the all other category is primarily due to marketing efforts incurred by Fisher Media
Services Company for Fisher Plaza.



General and administrative expenses



|Three months ended March 31 |  | 2003 |            |   | % Change |       |   | 2002 |  
|--------------------------- |  | ---- | ---------- | - | -------- | ----- | - | ---- | -
|Television                  |  | $    | 4,613,000  |   |          | 4.9   | % |      | $
|Radio                       |  |      | 2,507,000  |   |          | 12.1  | % |      |  
|Real estate                 |  |      | 506,000    |   |          | -21.1 | % |      |  
|All other                   |  |      | 817,000    |   |          | -42.4 | % |      |  
|Corporate and eliminations  |  |      | 3,044,000  |   |          | 85.7  | % |      |  
|                            |  |      |            |   |          |       |   |      |  
|Consolidated                |  | $    | 11,487,000 |   |          | 11.2  | % |      | $
|                            |  |      |           
|Percentage of revenue       |  |      | 33.0       | % |          |       |   |      |  



The increase in general and
administrative expenses at our television and radio segments is principally due to higher medical benefits. Other employee-related costs also increased at our Seattle radio operations as a result of additional personnel required for the all-news
format and broadcast of Seattle Mariners baseball.



The decrease in general and
administrative expenses in the real estate segment is primarily attributable to a decrease in salaries and related costs as a result of staff reductions as the Company continues to reduce its real estate portfolio.



The decrease in general and administrative expenses in the all other category is primarily
attributable to expenses incurred by Civia, Inc. during the first quarter of 2002 in connection with development of the Civia Media Terminal. No development took place in 2003.



The increase in general and administrative expenses at the corporate segment is principally related to legal and consulting fees incurred in
connection with a review of strategic alternatives that concluded in February 2003.



Depreciation



|Three months ended March 31 |  | 2003 |           |   | % Change |       |   | 2002 |  
|--------------------------- |  | ---- | --------- | - | -------- | ----- | - | ---- | -
|Television                  |  | $    | 2,941,000 |   |          | -0.7  | % |      | $
|Radio                       |  |      | 416,000   |   |          | 45.2  | % |      |  
|Fisher Plaza                |  |      | 420,000   |   |          | 25.3  | % |      |  
|Real estate                 |  |      | 619,000   |   |          | -15.8 | % |      |  
|All other                   |  |      | 355,000   |   |          | 246.7 | % |      |  
|Corporate and eliminations  |  |      | 48,000    |   |          | -18.9 | % |      |  
|                            |  |      |           |   |          |       |   |      |  
|Consolidated                |  | $    | 4,799,000 |   |          | 7.1   | % |      | $
|                            |  |      |          
|Percentage of revenue       |  |      | 13.8      | % |          |       |   |      |  



The increase in depreciation at the
radio segment is largely attributable to capital expenditures made in connection with the relocation of Seattle radio operations to Fisher Plaza in fall of 2002.



The increase in depreciation at Fisher Plaza relates to continued development of the project.



The decrease in depreciation and amortization at our real estate segment relates primarily to
depreciation of the Lake Union properties during the first quarter of 2002. Those properties were sold in the fall of 2002 and, therefore, are excluded from 2003 results.



The increase in depreciation in the all other category is attributable to depreciation of web publishing software at the Fisher Media
Services corporate group.



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Income (Loss) from operations



|Three months ended March 31 |  | 2003 |            |   | % Change |       |   | 2002 |  
|--------------------------- |  | ---- | ---------- | - | -------- | ----- | - | ---- | -
|Television                  |  | $    | (909,000   | ) |          | -22.5 | % |      | $
|Radio                       |  |      | (2,205,000 | ) |          | N/A   |   |      |  
|Fisher Plaza                |  |      | 1,732,000  |   |          | 285.8 | % |      |  
|Real estate                 |  |      | 591,000    |   |          | 6.5   | % |      |  
|All other                   |  |      | (1,164,000 | ) |          | -7.8  | % |      |  
|Corporate and eliminations  |  |      | (3,397,000 | ) |          | -60.7 | % |      |  
|                            |  |      |            |   |          |       |   |      |  
|Consolidated                |  | $    | (5,352,000 | ) |          |       |   |      | $



Income (loss) from operations by
segment consists of revenue less operating expenses. In computing income from operations by segment, other income, net and equity in operations of equity investees have not been included, and net loss on derivative instruments, loss from
extinguishment of long-term debt, interest expense, and income taxes have not been deducted.



Net loss on derivative instruments



|Three months ended March 31 |  | 2003 |          |   |  |  | 2002 |  
|--------------------------- |  | ---- | -------- | - |  |  | ---- | -
|                            |  | $    | (242,000 | ) |  |  |      | $



During the first quarter of 2003, net
loss on derivative instruments includes unrealized loss resulting from a decrease in fair value of a variable forward sales transaction amounting to $892,000, partially offset by unrealized gain from an increase in the fair value of an interest rate
swap agreement amounting to $650,000.



The amount for the first quarter of 2002
includes an unrealized gain resulting from an increase in fair value of the variable forward sales transaction amounting to $2,040,000, offset by an unrealized loss in an interest rate swap agreement amounting to $129,000, and a realized loss of
$2,636,000 on termination of an interest rate swap agreement.



Loss from
extinguishment of long-term debt



|Three months ended March 31 |  | 2003 |     |  |  | 2002 |  
|--------------------------- |  | ---- | --- |  |  | ---- | -
|                            |  | $    | -0- |  |  |      | $



We repaid certain loans in March 2002
and, as a result, expensed deferred loan costs amounting to $3,264,000. This expense was previously reported in the 2002 financial statements as an extraordinary item in the amount of $2,058,000, net of income tax benefit.



Other income, net



|Three months ended March 31 |  | 2003 |           |  |  | 2002
|--------------------------- |  | ---- | --------- |  |  | ----
|                            |  | $    | 5,864,000 |  |  |     



Other income, net includes dividends
received on marketable securities and, to a lesser extent, interest and miscellaneous income. The amount for the first quarter of 2003 also includes gains on sale of marketable securities amounting to $3,675,000 and a gain from sale of real estate
totaling $1,425,000.



Interest expense



|Three months ended March 31 |  | 2003 |            |   | % Change |      |   | 2002 |  
|--------------------------- |  | ---- | ---------- | - | -------- | ---- | - | ---- | -
|                            |  | $    | (5,536,000 | ) |          | 21.3 | % |      | $



Interest expense includes interest on
borrowed funds, loan fees, and net payments under a swap agreement. The increase in interest expense results from several factors, including: higher interest rates on some borrowings; an



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interest rate swap agreement that has a higher fixed interest rate than was in effect during the first quarter of 2002; we paid a premium in February 2003 in
connection with prepayment of certain long-term debt. Interest capitalized in connection with the Fisher Plaza project amounted to $669,000 and $399,000 during the three months ended March 31, 2003 and 2002, respectively.



Provision for federal and state income taxes (benefit)



|Three months ended March 31 |  | 2003 |            |   | % Change |       |   | 2002 |  
|--------------------------- |  | ---- | ---------- | - | -------- | ----- | - | ---- | -
|                            |  | $    | (2,015,000 | ) |          | -30.0 | % |      | $
|Effective tax rate          |  |      | 38.0       | % |          |       |   |      |  



The provision for federal and state
income taxes varies directly with pre-tax income. The effective tax rate varies from the statutory rate primarily due to a deduction for dividends received, offset by the impact of state income taxes.



Other comprehensive income (loss)



|Three months ended March 31 |  | 2003 |            |   |  |  | 2002
|--------------------------- |  | ---- | ---------- | - |  |  | ----
|                            |  | $    | (1,027,000 | ) |  |  |     



Other comprehensive income (loss)
includes unrealized gain or loss on our marketable securities and, during a portion of 2002, the effective portion of the change in fair value of an interest rate swap agreement, and is net of income taxes.



During the three months ended March 31, 2003 the value of our marketable securities increased
$587,000, net of tax. Also during the period, we realized gain amounting to $2,024,000, net of tax, from sale of our investment in Weyerhaeuser Company common stock, which was reclassified to operations.



At March 31, 2003, our marketable securities consisted of 3,002,376 shares of SAFECO
Corporation. The per share market price of SAFECO Corporation common stock was $34.67 at December 31, 2002, $34.97 at March 31, 2003, $31.15 at December 31, 2001, and $32.04 at March 31, 2002.



During the period from January 1, 2002 through March 21, 2002 we used an interest rate swap,
designated as a cash flow hedge, to manage exposure to interest rate risks. During this period the fair value of the swap increased $543,000, net of tax, which is recorded in other comprehensive income. In connection with the refinancing of our
long-term debt, the swap agreement was terminated and the remaining negative fair market value of $2,636,000 ($1,713,000 net of tax benefit) was reclassified to operations.



Unrealized gains and losses are reported as accumulated other comprehensive income, a separate component of stockholders equity.



Liquidity and Capital Resources



As of March 31, 2003 we had working capital of $26,507,000 and cash and short-term cash
investments totaling $14,063,000. We intend to finance working capital, debt service, and capital expenditures primarily through operating activities. However, we will consider using available credit facilities to fund significant development
activities. As of March 31, 2003, approximately $40,000,000 is available under existing credit facilities.



Net cash provided by operating activities during the three months ended March 31, 2003 was $693,000. Net cash provided by operating activities consists of our net operating results, increased by non-cash expenses such
as depreciation and amortization, and adjusted by changes in operating assets and liabilities. Net cash provided by investing activities during the period was $18,230,000, including restricted cash of $12,778,000 that became available for general
corporate purposes during the first quarter, proceeds of $5,169,000 from the sale of marketable securities, and proceeds of $3,185,000 from collection of an installment note receivable from the sale of real estate; net cash provided by investing
activities was reduced by $3,013,000 invested for purchase of property, plant and equipment (including the Fisher Plaza project). Net cash used in financing activities was $28,375,000, primarily for payments on borrowing agreements and mortgage
loans.



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As of March 31, 2003, future maturities of notes payable and long-term debt, and television and radio broadcast rights
are as follows (in thousands):



|           |  | Notes PayableandLong-Term Debt |         | BroadcastRights
|---------- |  | ------------------------------ | ------- | ---------------
|2003       |  | $                              | 5,886   |                
|2004       |  |                                | 8,776   |                
|2005       |  |                                | 86,467  |                
|2006       |  |                                | 44,822  |                
|2007       |  |                                | 22,367  |                
|Thereafter |  |                                | 97,787  |                
|           |  |                                |         |                
|           |  | $                              | 266,105 |                
|           |  |                                |         |                



ADDITIONAL FACTORS THAT MAY AFFECT
OUR BUSINESS, FINANCIAL CONDITION AND FUTURE RESULTS



The following
risk factors and other information included in this quarterly report should be carefully considered. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we
currently deem immaterial also may impair our business operations. If any of the following risks occur, our business, financial condition and future results could be materially adversely affected.



A continuing economic downturn in the Seattle, Washington or Portland, Oregon areas or in
the national economy could adversely affect our operations, revenue, cash flow and earnings.



Our operations are concentrated primarily in the Pacific Northwest. The Seattle, Washington and Portland, Oregon markets are particularly important for our financial well being. Operating results during 2002 and 2003
were adversely impacted by a soft economy, and a continuing economic downturn in these markets could have a material adverse effect on our operations and financial condition. Because our costs of services are relatively fixed, we may be unable to
significantly reduce costs if our revenues continue to decline. If our revenues do not increase or if they continue to decline, we could continue to suffer net losses or such net losses could increase. In addition, a continued downturn in the
national economy has resulted and may continue to result in decreased national advertising sales. This could have an adverse affect on our results of operations because national advertising sales represent approximately one-third of our television
advertising net revenue.



Our restructuring may cause disruption of
operations and distraction of management, and may not achieve the desired results.



We continue to implement a restructuring of our corporate enterprise. This restructuring may disrupt operations and distract management, which could have a material adverse effect on our operating results. We cannot predict whether this
restructuring will achieve the desired benefits, or whether our Company will be able to fully integrate our broadcast communications and other operations. Because we do not control all aspects of the proposed sales or shut down activities we cannot
assure you that all such activities will occur. We cannot assure you that the restructuring will be completed in a timely manner or that any benefits of the restructuring will justify its costs. We may incur costs in connection with the
restructuring in a number of areas, including professional fees, marketing expenses, employment expenses, and administrative expenses. In addition, we may incur additional costs, which we are unable to predict at this time. Our proposed
restructuring involves the upstream merger of Fisher Broadcasting Company into Fisher Communications. We may determine that there are regulatory or contractual restrictions which may cause us to choose not to consummate this merger.



Our proposed sale of the Georgia television stations and the commercial property assets
and property management operations of Fisher Properties may not take place.



In 2003, we announced that we executed agreements to sell our Georgia television stations to a third party. We may be unable to close the sale of the Georgia stations, or the sale may not take place on the same terms that were



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previously announced, if we do not obtain FCC approval or other necessary consents. We have recently received notice that an informal objection to the
application seeking consent to the assignment of licenses for the Georgia stations was filed with the FCC, which may delay or prevent us from closing the sale of the stations. We may also be unable to sell the remaining commercial real estate assets
and property management operations of Fisher Properties on terms that are acceptable to us due to the market for commercial rental property in Seattle.



Our debt service consumes a substantial portion of the cash we generate, but our ability to generate cash depends on many factors beyond our control.



We currently use a significant portion of our operating cash flow to service our debt.
Our leverage makes us vulnerable to an increase in interest rates or a downturn in the operating performance of our businesses or a decline in general economic conditions. It further limits our ability to obtain additional financing for working
capital, capital expenditures, acquisitions, debt service requirements or other purposes, and may limit our ability to pay dividends in the future. Finally, it inhibits our ability to compete with competitors who are less leveraged than we are, and
it constrains our ability to react to changing market conditions, changes in our industry and economic downturns.



Prevailing economic conditions and financial, business and other factors, many of which are beyond our control, may affect our ability to satisfy our debt obligations and
our goals to reduce our debt. If in the future we cannot generate sufficient cash flow from operations to meet our obligations, we may need to refinance our debt, obtain additional financing, forego capital expenditures, or sell assets. Any of these
actions could adversely affect the value of our common stock. We cannot assure you that we will generate sufficient cash flow or be able to obtain sufficient funding or take other actions to satisfy our debt service requirements.



Foreign hostilities and further terrorist attacks may affect our revenues and results of
operations.



Our broadcasting operations experienced a loss of advertising
revenue and incurred additional operating expenses during the recent war with Iraq. In the future, we may experience a loss of advertising revenue and incur additional broadcasting expenses in the event the United States engages in foreign
hostilities or in the event there is a terrorist attack against the United States. A significant news event like a war or terrorist attack will likely result in the preemption of regularly scheduled programming by network news coverage of the event.
As a result, advertising may not be aired and the revenue for such advertising may be lost unless the broadcasting station is able to run the advertising at agreed-upon times in the future. There can be no assurance that advertisers will agree to
run such advertising in future time periods or that space will be available for such advertising. We cannot predict the duration of such preemption of local programming if it occurs. In addition, our broadcasting stations may incur additional
expenses as a result of expanded local news coverage of the local impact of a war or terrorist attack. The loss of revenue and increased expenses could negatively affect our results of operations.



The performance of the television networks could harm our operating results.



The operating results of our broadcasting operations are primarily
dependent on advertising revenues. Our Seattle and Portland television stations are affiliated with the ABC Television Network. Popularity of programming on ABC lagged behind other networks during 2002 and 2003, and contributed to a decline in
audience ratings, which negatively impacted revenues for our Seattle and Portland television stations. Continued weak performance by ABC, a decline in performance by CBS or FOX, or an adverse change in performance by other networks or network
program suppliers, could harm our business and results of operations.



Competition in the broadcasting industry and the rise of alternative entertainment and communications media may result in loss of audience share and advertising revenue by our stations.



We cannot assure you that any of our stations will maintain or increase its current audience
ratings or advertising revenues. Fisher Broadcastings television and radio stations face intense competition from local network affiliates and independent stations, as well as from cable and alternative methods of broadcasting brought about by
technological advances and innovations. The stations compete for audiences on the basis of programming popularity, which has a direct effect on advertising rates. Additional significant factors affecting a stations competitive position include
assigned frequency and signal strength. The possible rise in popularity of competing entertainment and communications media could also have a materially adverse effect on Fisher Broadcastings audience share and advertising revenues. In
addition, our principal marketing representative for the sale of national advertising for our Seattle and Portland television and radio stations is owned by a competitor, and the success of their efforts in selling national advertising is beyond our
control. We cannot predict either the extent to which such competition will materialize or, if such competition materializes, the extent of its effect on our business.



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The syndicator for several of our most popular talk radio programs recently acquired radio stations in the Seattle
market, and competes with our Seattle radio stations. We can give no assurance that we will continue to be able to acquire rights to such programs once our current contracts for these programs expire.



The FCC is currently considering whether to modify its national and local television
ownership limitations, its prohibition on common ownership of newspapers and broadcast stations in the same market, as well as its local radio ownership limitations. We cannot predict what action the FCC will take. If the FCC adopts proposals to
allow large broadcast groups to expand further their ownership on a national basis, to permit a single entity to own more than one station in markets with fewer independently owned stations, to allow consolidated newspaper and broadcast ownership
and operation, or to allow radio operators to increase their level of ownership in local markets, our existing operations could face increased competition from entities with significantly greater resources, and greater economies of scale, than
Fisher Broadcasting.



Our operating results are dependent on the success of
programming aired by our television and radio stations.



We make
significant commitments to acquire rights to television and radio programs under multi-year agreements. The success of such programs is dependent partly upon unpredictable and volatile factors beyond our control such as audience preferences,
competing programming, and the availability of other entertainment activities. Audience preferences could cause our programming not to gain popularity or decline in popularity, which could cause our advertising revenues to decline. In some
instances, we may have to replace programs before their costs have been fully-amortized, resulting in write-offs that increase operating costs.



In April 2002 we acquired the radio broadcast rights for the Seattle Mariners baseball team for a term of six years. The success of this programming is dependent on some
factors beyond our control, such as the continued competitiveness of the Seattle Mariners and the successful marketing of the team by the teams owners. If the Seattle Mariners fail to maintain their current fan base, the number of listeners to
our radio broadcasts will likely decrease, which would harm our ability to generate anticipated advertising dollars.



We converted one of our Seattle radio stations, KOMO AM, to an all news format which has higher costs than the previous format. If we are unable to
successfully increase the number of listeners, our margins could be adversely affected. We also recently entered into a joint sales agreement with KING FM, which is owned and operated by a third-party. Our success in selling advertising under this
agreement is closely tied to the stations programming performance, which is not under our control. If the stations ratings performance does not improve consistently, it will harm our ability to recoup our costs and generate a profit from
this agreement.



The FCCs extensive regulation of the broadcasting
industry limits our ability to own and operate television and radio stations and other media outlets.



The broadcasting industry is subject to extensive regulation by the FCC under the Communications Act of 1934, as amended. Compliance with and the effects of existing and future regulations could have a material
adverse impact on us. Issuance, renewal or transfer of broadcast station operating licenses requires FCC approval, and we cannot operate our stations without FCC licenses. Failure to observe FCC rules and policies can result in the imposition of
various sanctions, including monetary forfeitures, the grant of short-term (i.e., less than the full eight years) license renewals or, for particularly egregious violations, the denial of a license renewal application or revocation of a license.
While the majority of such licenses are renewed by the FCC, there can be no assurance that Fisher Broadcastings licenses will be renewed at their expiration dates, or, if renewed, that the renewal terms will be for eight years. If the FCC
decides to include conditions or qualifications in any of our licenses, we may be limited in the manner in which we may operate the affected stations.



The Communications Act and FCC rules impose specific limits on the number of stations and other media outlets an entity can own in a single market. The FCC attributes
interests held by, among others, an entitys officers, directors, certain stockholders, and in some circumstances, lenders, to that entity for purposes of applying these ownership limitations. The existing ownership rules or proposed new rules
may prevent us from acquiring additional stations in a particular market. We may also be prevented from engaging in a swap transaction if the swap would cause the other company to violate these rules.



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The FCC is currently considering whether to modify its national and local television ownership limitations, its
prohibition on common ownership of newspapers and broadcast stations in the same market, as well as its local radio ownership limitations. We cannot predict what action the FCC will take. If the FCC adopts proposals to allow large broadcast groups
to expand further their ownership on a national basis, to permit a single entity to own more than one station in markets with fewer independently owned stations, to allow consolidated newspaper and broadcast ownership and operation, or to allow
radio operators to increase their level of ownership in local markets, our existing operations could face increased competition from entities with significantly greater resources, and greater economies of scale, than Fisher Broadcasting.



We may lose audience share and advertising revenue if we are unable to reach agreement
with cable companies regarding the retransmission of signals of our television stations.



Many viewers of our television stations receive their signals via retransmissions by cable television systems. All television stations are generally entitled to be carried on cable television systems in their local
markets without compensation from the cable system (must-carry). Alternatively, commercial television stations may choose to require cable television systems to obtain their permission (retransmission consent) to carry the
signal of their station. In such cases, the terms of carriage, including compensation, are subject to negotiation between the station and the cable system. The decision as to whether a television stations relationship with each local cable
system will be governed by must-carry or by retransmission consent arrangements is binding for a three-year period.



On October 1, 2002, each of Fisher Broadcastings television stations sent notices to cable systems in their market electing must-carry or retransmission consent
status for the period from January 1, 2003 through December 31, 2005. We elected retransmission consent status with respect to a number of key cable systems. We have granted temporary permission for such cable systems to continue to retransmit the
signal of the station involved while a retransmission consent agreement is under negotiation. There is no assurance, however, that retransmission consent agreements can be negotiated successfully with any cable system. If we cannot reach agreement
regarding the terms under which a station will be retransmitted by a cable system, the cable system will be prohibited by law from continuing to carry the signal of that station. This could have an adverse effect on the ability of the public to
receive the signal of affected station, ultimately resulting in reduced audience share and advertising revenue.



A write-down of goodwill to comply with new accounting standards would harm our operating results.



Approximately $67 million (excluding amounts classified as held for sale), or 13.2% of our total assets as of June 30, 2003, consists of
unamortized goodwill. On January 1, 2002, we adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (FAS 142). FAS 142 changed the accounting for goodwill from an amortization method to an
impairment-only approach. As a result of our adoption of FAS 142 we recorded a charge for impairment of goodwill amounting to $99 million before income tax benefit or $64 million after income taxes. Goodwill is to be tested at the reporting unit
level annually or whenever events or circumstances occur indicating that goodwill might be impaired. If impairment is indicated as a result of future annual testing, we will be required to record an additional impairment charge when such impairment
occurs.



Dependence on key personnel may expose us to additional risks.



Our business is dependent on the performance of certain key employees,
including our chief executive officer and other executive officers. We also employ several on-air personalities who have significant loyal audiences in their respective markets. We can give no assurance that all such key personnel will remain with
us. The loss of any key personnel could harm our operations and financial results.



The non-renewal or modification of affiliation agreements with major television networks could harm our operating results.



Our television stations affiliation with one of the four major television networks (ABC, CBS, NBC and FOX) has a significant impact on the composition of the
stations programming, revenues, expenses and operations. We cannot give any assurance that we will be able to renew our affiliation agreements with the networks at all, or on satisfactory terms. In recent years, the networks have been
attempting to change affiliation arrangements in manners that would disadvantage affiliates. The non-renewal or modification of any of the network affiliation agreements could harm our operating results.



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A network might acquire a television station in one of our markets, which could harm our business and operating
results.



If a network acquires a television station in a market in which
we own a station affiliated with that network, the network will likely decline to renew the affiliation agreement for our station in that market, which could harm our business and results of operations.



Our operations may be adversely affected by power outages, severe weather, increased
energy costs or earthquakes in the Pacific Northwest.



Our corporate
headquarters and a significant portion of our operations are located in the Pacific Northwest. The Pacific Northwest has from time-to-time experienced earthquakes and experienced a significant earthquake on February 28, 2001. We do not know the
ultimate impact on our operations of being located near major earthquake faults, but an earthquake could harm our operating results. Severe weather, such as high winds, can also damage our television and radio transmission towers, which could result
in loss of transmission, and a corresponding loss of advertising revenue, for a significant period of time. In addition, the Pacific Northwest may experience power shortages or outages and increased energy costs. Power shortages or outages could
cause disruptions to our operations, which in turn may result in a material decrease in our revenues and earnings and have a material adverse effect on our operating results. Power shortages or increased energy costs in the Northwest could harm the
regions economy, which could reduce our advertising revenues. Our insurance coverage may not be adequate to cover the losses and interruptions caused by earthquakes, severe weather and power outages.



Health concerns relating to Severe Acute Respiratory Syndrome (SARS) could disrupt or
depress economic activity, which could harm our results of operations.



Health concerns related to the spread of SARS could disrupt or depress economic activity, harm trade and result in a decrease in national and local advertising sales. Any decrease in television or radio advertising may harm our results of
operations.



Our computer systems are vulnerable to viruses and unauthorized
tampering.



Despite our implementation of network security measures, our
servers and computer systems are vulnerable to computer viruses, break-ins, and similar disruptions from unauthorized tampering with our computer systems. Any of these events could cause system interruption, delays and loss of critical data. Our
recovery planning may not be sufficient for all eventualities.



Our efforts
to develop new business opportunities are subject to technological risk and may not be successful, or results may take longer than expected to realize.



We are developing new opportunities for creating, aggregating and distributing content through non-broadcast media channels, such as the Internet, cell phones, and
web-enabled personal digital assistants. The success of our efforts is subject to technological innovations and risks beyond our control, so that the anticipated benefits may take longer than expected to realize. In addition, we have limited
experience in non-broadcast media, which may result in errors in the conception, design or implementation of a strategy to take advantage of the opportunities available in that area. We therefore cannot give any assurance that our efforts will
result in successful products or services.



Our ownership and operation of
real property, including Fisher Plaza, is subject to risks, including those relating to the economic climate, local real estate conditions, potential inability to provide adequate management, maintenance and insurance, potential collection problems,
reliance on significant tenants, and regulatory risks.



Revenue and
operating income from our properties and the value of our properties may be adversely affected by the general economic climate, the local economic climate and local real estate conditions, including prospective tenants perceptions of
attractiveness of the properties and the availability of space in other competing properties. We have developed the second building at Fisher Plaza, which entailed a significant investment. The softened economy in the Seattle area could adversely
affect our ability to lease the space of our properties on attractive terms or at all, which could harm our operating results. In addition, a continuing of the severe downturn in the telecom and high-tech sectors may significantly affect our ability
to attract tenants to Fisher Plaza, since space at Fisher Plaza is marketed in significant part to organizations from these sectors. Other risks relating to our real estate operations include the potential inability to provide adequate management,
maintenance and insurance, and the potential inability to collect rent due to bankruptcy or insolvency of tenants or otherwise. One of our properties is leased to a tenant that occupies a substantial portion of the property and the departure of this
tenant or its inability



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to pay their rents or other fees could have a significant adverse effect on our real estate revenues. Real estate income and values may also be adversely
affected by such factors as applicable laws and regulations, including tax and environmental laws, interest rate levels and the availability of financing. We carry comprehensive liability, fire, extended coverage and rent loss insurance with respect
to our properties. There are, however, certain losses that may be either uninsurable, not economically insurable or in excess of our current insurance coverage limits. If an uninsured loss occurs with respect to a property, it could harm our
operating results.



A reduction on the periodic dividend on the common stock
of SAFECO may adversely affect our revenue, cash flow and earnings.



We
are a 2.2% stockholder of the common stock of SAFECO Corporation. If SAFECO reduces its periodic dividends, it will negatively affect our cash flow and earnings. In February 2001, SAFECO reduced its quarterly dividend from $0.37 to $0.185 per share.



Antitrust law and other regulatory considerations could prevent or delay
our business activity or adversely affect our revenues.



The completion of
any future transactions we may consider may be subject to the notification filing requirements, applicable waiting periods and possible review by the Department of Justice or the Federal Trade Commission under the Hart-Scott-Rodino Act. Any
television or radio station acquisitions or dispositions will be subject to the license transfer approval process of the FCC. Review by the Department of Justice or the Federal Trade Commission may cause delays in completing transactions and, in
some cases, result in attempts by these agencies to prevent completion of transactions or to negotiate modifications to the proposed terms. Review by the FCC, particularly review of concentration of market revenue share, may also cause delays in
completing transactions. Any delay, prohibition or modification could adversely affect the terms of a proposed transaction or could require us to abandon a transaction opportunity. In addition, campaign finance reform laws or regulations could
result in a reduction in funds being spent on advertising in certain political races, which would adversely affect our revenues and results of operations in election years.



We may be required to make additional unanticipated investments in HDTV technology, which could harm our ability to fund other operations
or lower our outstanding debt.



Although our Seattle, Portland, Eugene and
Boise television stations currently comply with FCC rules requiring stations to broadcast in high definition television (HDTV), our stations in smaller markets do not because they are operating pursuant to Special Temporary Authority to utilize low
power digital facilities. These Special Temporary Authorizations must be renewed every six months, and there is no assurance that the FCC will continue to extend those authorizations. If the FCC does not extend the authorizations for Fishers
smaller stations, then we may be required to make substantial additional investments in digital broadcasting to maintain the licenses of our smaller market stations. This could result in less cash being available to fund other aspects of our
business or decrease our debt load.



ITEM 3 - QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISKS



The market risk in our financial
instruments represents the potential loss arising from adverse changes in financial rates. We are exposed to market risk in the areas of interest rates and securities prices. These exposures are directly related to our normal funding and investing
activities.



Interest Rate Exposure



Our strategy in managing exposure to interest rate changes is to maintain a balance of
fixed- and variable-rate instruments. We will also consider entering into interest rate swap agreements at such times as it deems appropriate. At March 31, 2003, the fair value of our fixed-rate debt is estimated to be approximately $1,200,000
greater than the carrying amount. Market risk is estimated as the potential change in fair value resulting from a hypothetical 10 percent change in interest rates and, at March 31, 2003, amounted to $1,715,000 on our fixed rate debt, which totaled
$89,676,000.



We also had $176,230,000 in variable-rate debt outstanding at
March 31, 2003. A hypothetical 10 percent change in interest rates underlying these borrowings would result in a $992,000 annual change in our pre-tax earnings and cash flows.



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We are a party to an interest rate swap agreement fixing the interest rate at 6.87%, plus a margin based on the
broadcasting subsidiarys ratio of consolidated funded debt to consolidated EBITDA, on a portion of our floating rate debt outstanding under an eight-year credit facility (Broadcast Facility). The notional amount of the swap reduces
as payments are made on principal outstanding under the broadcast facility until termination of the contract on March 22, 2004. At March 31, 2003, the notional amount of the swap was $65,000,000 and the fair value of the swap agreement was a
liability of $3,644,000. A hypothetical 10 percent change in interest rates would change the fair value of our swap agreement by approximately $50,000 at March 31, 2003. We have not designated the swap as a cash flow hedge; accordingly changes in
the fair value of the swap are included in Net loss on derivative instruments in the accompanying condensed consolidated financial statements.



Marketable Securities Exposure



The fair value of our investments in marketable securities at March 31, 2003 was $104,993,000. Marketable securities consist of 3,002,376 shares of SAFECO Corporation,
which is reported on the NASDAQ securities market. As of March 31, 2003, these shares represented 2.2% of the outstanding common stock of SAFECO Corporation. While we currently do not intend to dispose of our investments in marketable securities, we
have classified the investments as available-for-sale under applicable accounting standards. Mr. William W. Krippaehne, Jr., President, CEO, and a Director of the Company, is a Director of SAFECO Corporation. A hypothetical 10 percent change in
market prices underlying these securities would result in a $10,499,000 change in the fair value of the marketable securities portfolio. Although changes in securities prices would affect the fair value of the marketable securities portfolio and
cause unrealized gains or losses, such gains or losses would not be realized unless the investments are sold.



As of March 31, 2003, 3,000,000 shares of SAFECO Corporation stock owned by the Company were pledged as collateral under a variable forward sales transaction with a financial institution. A portion of the Forward
Transaction is considered a derivative and, as such, we periodically measure its fair value and recognize the derivative as an asset or a liability. The change in the fair value of the derivative is recorded in the income statement. As of March 31,
2003 the derivative portion of the Forward Transaction had a fair market value of $4,335,000, which is included in Net loss on derivative instruments in the accompanying condensed consolidated financial statements. A hypothetical 10 percent change
in the market price of SAFECO Corporation stock would change the market value of the Forward Transaction by approximately $7,700,000. A hypothetical 10 percent change in volatility would change the market value of the Forward Transaction by
approximately $350,000. A hypothetical 10 percent change in interest rates would change the market value of the Forward Transaction by approximately $550,000.



ITEM 4 - CONTROLS AND PROCEDURES



The Companys Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of its disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) and, based on their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the fiscal
quarter covered by this report, these disclosure controls and procedures are effective in ensuring that the information that the Company is required to disclose in the reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Commissions rules and forms, and that the disclosure controls and procedures are effective in ensuring that the information required to be reported is accumulated and
communicated to the Companys management, including its Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.



We have made no significant changes in internal controls over financial reporting during the last fiscal quarter that materially affected or
are reasonably likely to materially affect our internal controls over financial reporting. We intend to continue to refine our internal controls on an ongoing basis as we deem appropriate with a view towards continuous improvements.



Subsequent to the filing of our original report, management and PricewaterhouseCoopers LLP,
our independent accountants, have reported to our Audit Committee certain matters involving internal controls that PricewaterhouseCoopers LLP considers to be reportable conditions under standards established by the American Institute of Certified
Public Accountants. These matters relate to internal controls with respect to the identification of pension liability, the timing and recording of settlement losses and the classification of cash flows.



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These matters have been discussed among management, PricewaterhouseCoopers LLP and our Audit Committee. We have assigned
the highest priority to the correction of these reportable conditions and are committed to addressing them as soon as possible. We have recently hired additional corporate accounting staff and we intend to respond to the reportable conditions by
hiring additional accounting staff.



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PART II



OTHER INFORMATION



Item 6. Exhibits and Reports on Form 8-K



(a) Exhibits:



|2.1  | * |  | Asset Purchase Agreement dated as of January 29, 2003 between Fisher Broadcasting  Georgia, LLC, and Southeastern Media Holdings, Inc.                                                                                           
|---- | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  
|3.1  | * |  | Bylaws of Fisher Communications, Inc., as amended on April 24, 2003.                                                                                                                                                              
|     |  
|10.1 | * |  | Letter agreement dated July 23, 2002 between Fox Broadcasting Company and Fisher Broadcasting  Georgia, L.L.C., regarding WFXG TV, extending the term of the Station
Affiliation Agreement dated April 20, 2001 to June 30, 2007.
|     |  
|10.2 | * |  | Letter agreement dated July 23, 2002 between Fox Broadcasting Company and Fisher Broadcasting  Georgia, L.L.C., regarding WXTX TV, extending the term of the Station
Affiliation Agreement dated April 20, 2001 to June 30, 2007.
|     |  
|31.1 |   |  | Certification of Chief Executive Officer.                                                                                                                                                                                         
|     |  
|31.2 |   |  | Certification of Chief Financial Officer.                                                                                                                                                                                         
|     |  
|32.1 |   |  | Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                    
|     |  
|32.2 |   |  | Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                    

---

|* | Incorporated by reference from an original report on Form 10-Q filed on May 15, 2003.
|- | -------------------------------------------------------------------------------------



(b) Reports on Form 8-K:



A report on Form 8-K dated January 29, 2003 was filed with the Commission announcing the signing of an asset purchase agreement for the sale of the broadcasting
subsidiarys two Georgia television stations.



A report on Form 8-K dated
February 12, 2003 was filed with the Commission announcing fourth quarter and year-end 2002 financial results, the completion of a review of strategic alternatives by the Companys Board of Directors, and the retirement of director John
Mangels. The report also included a letter to shareholders from the Chairman of the Board and the Companys President and Chief Executive Officer, and a letter to employees from the Companys President and Chief Executive Officer.



A report on Form 8-K dated March 14, 2003 was filed with the Commission
announcing the appointment of Jerry St. Dennis as a director.



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SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.



|                        |  | FISHER COMMUNICATIONS, INC.                      
|----------------------- |  | -------------------------------------------------
|                        |  | (Registrant)                                     
|                        | 
|Dated November 14, 2003 |  | /s/ David D. Hillard                             
|                        |  | David D. Hillard                                 
|                        |  | Senior Vice President and Chief Financial Officer



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EXHIBIT INDEX



|Exhibit No. |  | Description                                                                                                                                                                                                                       
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1*        |  | Asset Purchase Agreement dated as of January 29, 2003 between Fisher Broadcasting  Georgia, LLC, and Southeastern Media Holdings, Inc.                                                                                           
|            | 
|3.1*        |  | Bylaws of Fisher Communications, Inc., as amended on April 24, 2003.                                                                                                                                                              
|            | 
|10.1*       |  | Letter agreement dated July 23, 2002 between Fox Broadcasting Company and Fisher Broadcasting  Georgia, L.L.C., regarding WFXG TV, extending the term of the Station
Affiliation Agreement dated April 20, 2001 to June 30, 2007.
|            | 
|10.2*       |  | Letter agreement dated July 23, 2002 between Fox Broadcasting Company and Fisher Broadcasting  Georgia, L.L.C., regarding WXTX TV, extending the term of the Station
Affiliation Agreement dated April 20, 2001 to June 30, 2007.
|            | 
|31.1        |  | Certification of Chief Executive Officer.                                                                                                                                                                                         
|            | 
|31.2        |  | Certification of Chief Financial Officer.                                                                                                                                                                                         
|            | 
|32.1        |  | Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                    
|            | 
|32.2        |  | Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                    

---

|* | Incorporated by reference from our original report on Form 10-Q filed on May 15, 2003.
|- | --------------------------------------------------------------------------------------



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